High rise tussle: Gillman Heights is set to be sold to CapitaLand, Hotel Properties and two private funds
Business Times - 26 Jun 2008
Judge says minority owners did not provide adequate reasons to stop sale
By MICHELLE QUAH
THE High Court has dismissed an appeal by minority owners of Gillman Heights Condominium to stop its en bloc sale.
This means that the $548 million sale of the development to CapitaLand, Hotel Properties and two private funds is set to go through.
Justice Choo Han Teck, in his judgment yesterday, said that he was 'satisfied' that the appeal by the minority owners 'must fail', as they did not provide adequate reasons as to why he should stop the sale.
The Strata Titles Board (STB) had approved the collective sale of the 607-unit, 99-year leasehold estate late last year. But a group of minority owners, represented by Senior Counsel Michael Hwang, had appealed that decision.
They argued that the STB had erred in approving the sale. They said that collective sale rules do not apply to Gillman Heights, which is an former HUDC estate. They also argued that insufficient notices were put up informing owners of the proposed sale and that the collective sale agreement - signed by the consenting owners - was not validly extended before the deal was brokered with the CapitaLand consortium.
Justice Choo ruled yesterday that the law does not mean to treat privatised HUDC estates differently from other private strata developments with a management corporation. He said that a privatised HUDC estate can participate in the benefits of an en bloc sale if the requisite conditions are met. He also agreed with the STB's ruling that sufficient notices had been posted and that the collective sale agreement had been validly extended.
The minorities had also argued that the sale was done in bad faith. They said that the National University of Singapore (NUS), which owns a sizeable chunk of Gillman Heights and had agreed to the en bloc sale, has a 15 per cent stake in Ankerite, the entity that purchased Gillman Heights.
Justice Choo noted yesterday that NUS's relationship with the buyer - which came to light after the STB approval - was not presented before the STB at the relevant time. 'A court deliberates only on the basis of the evidence before it,' he said. He said that it was strictly up to the STB to judge if there was an act of bad faith by reason of the relationship between NUS and Ankerite - but that he was not persuaded that the board should hear the issue again.
Justice Choo also agreed with the STB that there was no bad faith regarding the sale price of Gillman Heights, as it was $20 million above the reserve price.
The minorities had also argued that one of the STB board members, Michael Ng of Savills (Singapore), was a real estate valuation professional who had worked on projects involving the consenting owners' lawyers.
But Justice Choo said: 'I am of the view that it is too tenuous an objection. Professionals cannot avoid working on the same projects. It does not follow that they necessarily agree or have reasons to be biased or prejudiced against other professionals.'
Gillman Heights owners will get between $870,000 and $950,000 per unit in the en-bloc sale. But many of those objecting to the sale say that it is more important for them to be able to keep their homes.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved
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1 comment:
I am an owner in Tampines Court and would like to raise my views on the misleading facts happening in my estate by the minority owners on the following:
"The developer buyer will NOT EXTEND the Sales and Purchase Agreement.
The enbloc sale of Tampines Court is dead if the STB does not approve the sale by the 24 July 2008. Wonders will never cease! "
My view:
The STB heard the case from 16th to 18th June 2008. At the end of the hearing, two more witnesses had yet to be cross-examined.
The objectors had also raised the issue that the unused beta sum should be distributed amongst all owners. The sale committee agreed that the unused beta sum would be so distributed.
The STB has fixed 7th Aug 2008 for the continued hearing. It is estimated that only one more day would be needed to complete the cross-examination of these two witnesses.
The sale committee endeavoured to obtain an extension of the 25th July 2008 deadline from the Purchaser. At the moment, Far East has reverted to say that they are not minded to agree to the extension.
The sale committee has applied to the STB this morning for the hearing date to be brought forward. This application is being closely monitored.
I believe the Sale Committee will update the majority owners on the development.
I will correct a piece of information put up by the objectors on their blogsite.
Far East obtained the Residential Property Approval (the RPA approval) on 25th July 2007 and served it on our lawyers on 26th July 2007.
At that time, the STB of Gillman Heights was being fought in the STB. The STB dismissed this argument in the Gillman Height decision on 21 December 2007.
The Tampines Court advertisements appeared 6 days later, on 27th December 2007.
The STB application was filed on 7th January 2008.
It is therefore not correct to say that the STB application was not filed for 9 months.
I respect the objectors' point of views.
Throughout this exercise, before the STB, special efforts were made to try and engage the objectors in a constructive manner.
There were many dialogues.
Moreover, even at the STB stage, when the objectors for the first time raised the issue of the distribution of the unused beta sum, the sale committee agreed that the unused sum should be shared by all.
However, this was objected to as well.
It is incorrect to say that the unpaid maintenance and sinking funds contributions would be paid from the beta sum. The beta sum is utilised for the privatisation cost.
It is hoped that this information would be corrected as well.
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